The New York Board of Trade's active December cocoa contract fell $22, or 1.6 percent, to settle at $1,322 a tonne, after hitting a contract low $1,320 earlier in the session.
The bottom trade was the weakest for a front-month contract on a continuation basis since August 17. The December contract's previous contract low of $1,328 was set September 26.
Among other cocoa futures, March lost $24 to end at $1,356, after marking a low of $1,355. Back months shed $22 to $23.
"The dollar certainly helped, and this time of the year you are going to have a steady hedge flow in the market," a trader said, referring to hedging the new 2005/06 main crop from West Africa, the top cocoa growing region.
December cocoa has fallen about 16 percent from a near-term peak of $1,575 on September 9, due in large part to signs of sufficient world cocoa supply.
Last week, exporters in Ivory Coast, the top cocoa producer, estimated bean arrivals at the country's ports reached 171,959 tonnes by October 30, well above the 61,156 tonnes delivered to ports by the same date last year.
But falling farmgate prices could prompt cocoa farmers to hold back beans from the market, industry sources told Reuters in Abidjan on Monday. Meanwhile, dollar-denominated commodities lost steam after the dollar extended gains against most currencies on the prospects the US interest rate outlook would continue to underpin the greenback.
The Reuters/Jeffries CRB Index of 19 commodity futures was off about 1.0 percent at 315.62 by 12:50 pm (1750 GMT).
A stronger dollar promotes arbitrage-related selling for cocoa futures here - more than in London, where the cocoa market is denominated in sterling.
The Liffe's benchmark December cocoa delivery settled at 798 pounds a tonne, off 1.5 percent. NYBOT cocoa futures trading volume reached an estimated 26,080 lots, compared with Friday's official tally of 19,219 contracts.
The bulk of the turnover was dominated by December/March rollovers ahead of the December contract's first notice day for delivery on November 15.
"We've got the rollover going on, and that's what's helping us," said a trader.
Looking ahead, traders put technical support in the December contract at $1,300, which was the bottom trade for a front-month contract in July 2004.